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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Dan3 who wrote (23023)	12/21/2000 2:15:11 PM
From: Charles R	Read Replies (2) \| Respond to of 275872

Dan, <Re:AMD hardly needs Dresden. Where would AMD be without the extra 100 to 200MHZ it gets from the Dresden process? 15% is a pretty big deal in this business.> I see you have selectively clipped off a part of the sentence I posted. I said, "At 7Mu level, AMD hardly needs Dresden." Fabs don't come free. Fabs are put in place to support a certain unit output level. The assumptions made when AMD planned the Dresden ramp haven't quite worked out. I seriously doubt if the incremental value of the additional revenues from 1.1/1.2GHz shipments overcomes the expense of second fab - let alone the cost of maintaining two different sets of designs processes etc. make no mistake. AMD only needs Dresden if it can be meaningfully utilized - at least 60% of available capacity. Currently, it is safe to say that a good chunk of Dresden output is going into "unpackaged die inventory bucket". That's what happens if one plans for 8-9Mu and ends up with ~7MU. (and even the 9Mu number from what I understand is lower than the 10Mu level that was planned internally at AMD a long time back) It is unfortunate from the AMD long's perspective that when the market was hot the management screwedup and the infrastructure wasn't there to exploit the demand. As luck would have it, by the time the infrastructure starts becoming available, the demand is down significantly. Chuck